Stocks to buy: HDFC Securities recommends HG Infra and Styrenix as its fundamental stock picks

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Also Read: Stocks to buy: Sumeet Bagadia recommends 5 breakout stocks today — May 14 Here are HDFC Securities’ fundamental stock picks: HG Infra Engineering has maintained a robust order book and de-risked its business by reducing its reliance on road orders by venturing into Rail, Metro and Solar projects. On the order inflow front, the company expects ₹11,000 - 12,000 crore, with ₹8,000 crore, ₹1,000 crore and ₹2,000 crore from highways, solar and water/ railways, respectively. Its FY25 revenue growth guidance stands at ~15-20% with an EBITDA margin of ~16%.

HDFC Securities expects the company’s revenue, EBITDA and PAT to grow at 15%, 13% and 5% CAGR respectively over FY24-FY26. It believes investors can buy the stock in the price band of ₹1,169 - 1,193 and add on dips in ₹1,058 - 1,079 band for a base case fair value of ₹1,300 and bull case fair value of ₹1,392 in the next 2-3 quarters. Also Read: Stocks in focus: Ruchit Jain of 5paisa recommends buying these 2 stocks today Styrenix Performance Materials is one of the leading players in ABS with diversified customers.

It has a debt free cash-rich balance sheet. In FY24, the company reported healthy performance despite 6% decline in sales due to lower realisations. Operating margin improved marginally to 11.9% and net profit was down 5.4%.

Company has embarked upon large capex in a phased manner and that would help register strong revenue growth in the coming years. The brokerage firm estimates 13.4% CAGR in revenue along with operating margin at around 12-13% over FY24-26E. The company is likely to register 17.5% CAGR in net profit over the same period.